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2. Consider a Cournot competition environment with one good and two firms, Firm 1 and Firm 2. The (pure) strategy space of Firm 1 is
2. Consider a Cournot competition environment with one good and two firms, Firm 1 and Firm 2. The (pure) strategy space of Firm 1 is S; = [0, 1], and the strategy s; of Firm 1 corresponds to the amount of the good they produce. Similarly, the (pure) strategy space of Firm 2 is S = [0, 1], and the strategy So of Firm 2 corresponds to the amount of the good they produce. If Firm 1 were to produce quantity s1 and Firm 2 were to produce quantity s2, the prevailing price in the good market would be 1 s; 52, the utility of Firm 1 would be their profit, u;i(s1,$2) = (1 81 s2 )s1, and the utility of Firm 2 would be their profit, uz(s1, s2) = (1s1 s2c)sa2, where 0
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